Where an individual is the sole legal registered owner of property it is to be assumed that they are also the sole beneficial owner and it is for those contending otherwise to satisfy the burden of proof.
In Milsom and another v Smith and another [2023] EWHC 255 (Comm) the applicant enforcement receivers secured a declaration that a property was beneficially owned by the respondent and subject to a confiscation order of just under £41m made against him in November 2006 following his admission of guilt to theft and false accounting.
The case concerned a property at 137 Cavendish Meads, Ascot, of which the first respondent was sole legal registered owner and whether it was an available asset of his for the purposes of the confiscation order or whether it was beneficially owned by his late mother and, following her death, it passed to her estate – the second respondent.
The first respondent had acquired the property in 1985 from a third party and claimed to have made an oral declaration of trust of the beneficial ownership of the property in favour of his parents either contemporaneously or immediately afterwards. His parents lived at the property until their deaths – his father in the late 1980s and his mother in December 2022.
There were no contemporaneous documentary materials evidencing any declaration, agreement, arrangement or understanding. In fact, the evidence was fundamentally inconsistent with any such arrangement.
The first respondent had obtained a mortgage to acquire the property from the Halifax on the basis that he would be the sole legal and beneficial owner. He later granted a second charge to secure a personal liability of £1.5m and extended the mortgage to secure a further advance from the Halifax. The property was used as his correspondence address.
The evidence given by the first respondent’s mother, in a statement made prior to her death, and by his brother that she had made the mortgage payments of over £900 per month from her state pension, was incredible. There was no mention of the second charge or further advance. The brother, as their mother’s executor, had a very real interest in the beneficiaries of her estate – his sons and nieces – acquiring an interest in the property. His evidence was unreliable.
There was no evidence which came close to rebutting the presumption that the respondent was the sole legal and beneficial owner of the property and therefore subject to the confiscation order.
Louise Clark is a property law consultant and mediator
